Yes, you actually can get the lender to release the lien on the property. What you can do is to offer to pay down the loan principle by the amount of equity in the home. So, for example, if the home is worth $400k (market value) and you still owe $200k on it, a lender is likely to agree to release the lien if you paid an additional one-time $200k payment to principle.

I would be happy to have a discussion on this topic. Technically speaking a lender does not need to ever release collateral on an SBA 7A loan. However, if you have paid the loan down to a point where it is fully collateralized by hard business assets, then the Bank could chose to release excess collateral. The biggest challenge that exists in getting this done is the advance rates and what the SBA will advance on as hard collateral. The SBA will only count has hard collateral 50% of the book value of equipment / fixed assets, 75% on the appraised value of these assets, 10% on FF&E, 10% on inventory, and nothing on A/R, and 85% on commercial real estate. This means many businesses that are highly leveraged based on goodwill may never be fully collateralized from the SBA perspective, meaning they are likely to want to keep that guarantee in place forever.

As has always been suggested, you could pay down the loan the value that property provides in collateral and then get the lender to release that collateral in exchange for that paydown. You could also look to refinance into a more conventional loan product and get the property released that way.

If you have additional questions on outside collateral, you can reach me here or directly at redacted